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What do you think will happen to agencies next April?

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    What do you think will happen to agencies next April?

    So, I'm after some thoughts and inputs on this, we've been bouncing idea's about here at work, and it would be interesting to hear what you guys think will happen.

    This is based on the assumption that all of the changes that are currently being debated happen - no expenses if through an agency or umbrella, much stronger IR35 application, and dividend changes making contracting less financially rewarding.

    We have 2 main idea's -

    1. Rates go up significantly for contractors that take contracts involving overnight stays and weeks away from home; or contractors only consider local gigs where expenses are not that high (which causes all kinds of problems for clients in the arse end of nowhere)

    Main concern here is that a lot of clients perceive contractors to be expensive anyway, and if I explained to them that my guys want a rate rise as they cannot claim expenses, they simply would not give a damn, and not change what they pay.

    2. The entire model changes, and we charge an introductory fee (no idea how we would work this out, say 10% of the entire value of the contract?), and then we leave the contractual affairs between client and contractor to themselves

    Only concerns with the 2nd model, is that for longer, higher value contracts, the fee would be very, very high, and if a contractor leaves part way through, or does not complete, then this would have to be refunded - but with no weekly time sheets to the agency, we would have no way of proving this. Awkward and potentially open to abuse. As well as this, another fee would have to be charged at renewal to keep the current level of profits in our business. Again, this is potentially awkward.

    I guess the cynical ones will hope that these changes will kill agency contract recruitment, so I expect to hear that also.

    So - what do people think? Either of the above model make sense, or is there another way that you can see this working? Or, have the Tories finally decided to kill contracting off for all but the very dedicated?

    #2
    I think contractors will whine and take the hit.

    Hence I believe agencies will be unaffected.

    Comment


      #3
      There are more options than that.

      Agencies will probably stay as they are...

      3) Mass movement back into permiedom. Unlikely for hardcore contractors but possible for a large percentage of newbies or those who CBA any longer.

      4)Those contractors that stay will not be inclined to work beyond a daily commute, making the contracting workforce less flexible.

      Clients may not like using contractors and consider them expensive, but watch them whine when the market dries up and they get sub-par consultancies dropping in 'cheap' labour...

      The good news may be that 3-4 years down the line when everyone realises that cheap may be expensive in the long run, the regs are relaxed. But that's just wishful thinking.
      "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
      - Voltaire/Benjamin Franklin/Anne Frank...

      Comment


        #4
        Originally posted by cojak View Post
        The good news may be that 3-4 years down the line when everyone realises that cheap may be expensive in the long run, the regs are relaxed. But that's just wishful thinking.
        +1

        But I had hoped offshoring would be found to be bad 15 years ago.

        Comment


          #5
          Sat up north I will have a pick of local contracts in what you call the arse end of nowhere (until they bring someone in on a tier 2)...

          Rates will be higher because there will be about 8 companies after about 4 decent contractors (my speciality). Even C# devs will have a field day...

          For reference I will automatically be rejecting Benton unless I get a parking space... Remember this contract gave me a guaranteed window seat in a full hot desk office...

          Mind you current permie rates do look tempting I just don't want appraisals....
          Last edited by eek; 20 August 2015, 09:07.
          merely at clientco for the entertainment

          Comment


            #6
            Originally posted by cojak View Post
            There are more options than that.

            3) Mass movement back into permiedom. Unlikely for hardcore contractors but possible for a large percentage of newbies or those who CBA any longer.
            I can't help thinking there is going to be three camps here. The hardcore that stick it through, the middle men that know a little bit and are in it for the money who will jump and the rafts of people that haven't a bleedin clue and will continue oblivious, completely ignored by HMRC again. Saying that I would imagine their accountants(!?) would spell it out to them at some point after the event and they follow the rest in the permiedom so maybe not as bigger group as I indicated.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              I think there will be a move to stopping "resource gap" contractors, 2/3rd line support bods who are there because clients can't/won't hire permies. True contractors, consultants who are an expert in their field of specialty will continue to be engaged, and are already paid the big rates and can absorb the costs of travelling in their existing rates. My hotel and mileage is about 13% of my gross monthly invoice, I will whine but I will take the hit.
              Originally posted by Stevie Wonder Boy
              I can't see any way to do it can you please advise?

              I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

              Comment


                #8
                Originally posted by SimonMac View Post
                I think there will be a move to stopping "resource gap" contractors, 2/3rd line support bods who are there because clients can't/won't hire permies.
                The grim reality is that this is a huge chunk of a lot of agencies billings per week.

                It also makes very little sense - as an example, we do a lot of work with universities this time of year who need a temp help desk team to move the freshers in and sort out all the things they mess up. They typically hire 5-6 temp heads for 6 weeks to get everything smoothed out, and without this, they would suffer. Hiring perm would not be an option for them, after this time they have no work and would just have to sack them.

                However, I do think you are right, as placing low pay/charge (I make £2 an hour on a £12 an hour support bod) just does not work with no expenses, clients will not pay more for this, and without expenses, its a pretty bad wage, going perm is better.

                Comment


                  #9
                  Originally posted by czakky View Post
                  The grim reality is that this is a huge chunk of a lot of agencies billings per week.

                  It also makes very little sense - as an example, we do a lot of work with universities this time of year who need a temp help desk team to move the freshers in and sort out all the things they mess up. They typically hire 5-6 temp heads for 6 weeks to get everything smoothed out, and without this, they would suffer. Hiring perm would not be an option for them, after this time they have no work and would just have to sack them.

                  However, I do think you are right, as placing low pay/charge (I make £2 an hour on a £12 an hour support bod) just does not work with no expenses, clients will not pay more for this, and without expenses, its a pretty bad wage, going perm is better.
                  Those 6 week hires won't be an issue next year. They just won't be able to remove expenses from their wages before the umbrella pays them. It may mean that the quality of people the uni gets may be worse but I doubt that would be the case. Its more likely they will just receive a smaller pay pocket...

                  The following year would be more difficult when the IR35 stuff comes in...

                  Personally I think the only solution will be a tier 2 type test. Show that its temporary or show that you can't find the resources with a standard permanent advert. Once you've done that IR35 doesn't apply
                  Last edited by eek; 20 August 2015, 09:31.
                  merely at clientco for the entertainment

                  Comment


                    #10
                    Originally posted by czakky View Post
                    The grim reality is that this is a huge chunk of a lot of agencies billings per week.

                    It also makes very little sense - as an example, we do a lot of work with universities this time of year who need a temp help desk team to move the freshers in and sort out all the things they mess up. They typically hire 5-6 temp heads for 6 weeks to get everything smoothed out, and without this, they would suffer. Hiring perm would not be an option for them, after this time they have no work and would just have to sack them.

                    However, I do think you are right, as placing low pay/charge (I make £2 an hour on a £12 an hour support bod) just does not work with no expenses, clients will not pay more for this, and without expenses, its a pretty bad wage, going perm is better.
                    There are always going to be temps, but they do not really need to follow the "contractor" route, they will have to go down the PAYE route where they are employed by the agency
                    Originally posted by Stevie Wonder Boy
                    I can't see any way to do it can you please advise?

                    I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

                    Comment

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